INTERMEDIATE // TRADING DESK
MODULE 04 // BOT DETECTION

Algo Trading Fingerprinting.

Distinguish legitimate algorithmic trading from unauthorized bots and market abuse algorithms.

ALGORITHM IDENTIFICATION

Algorithmic trading dominates modern markets. Distinguishing authorized algorithms from rogue bots or abuse strategies requires behavioral fingerprinting—identifying algorithms by their behavioral signatures rather than explicit identifiers.

Each algorithm has characteristic behaviors: order timing patterns, size distributions, reaction latencies, and strategy signatures. ABIS builds fingerprints from these behaviors to identify and track algorithms.

Fingerprinting enables: detection of unauthorized algorithms operating on the platform, identification when authorized algorithms malfunction or are compromised, and tracking of predatory algorithms that exploit other market participants.

TIMING PATTERNS

Algorithms operate with consistent timing. Human traders show variable latency. Detect bot-like precision.

TIMING

SIZE DISTRIBUTION

Algorithms use programmatic sizing (round lots, percentages). Humans show irregular size patterns.

SIZING

REACTION LATENCY

Measure response time to market events. Sub-human latency indicates algorithmic operation.

SPEED

STRATEGY SIGNATURE

Identify strategy type: market making, momentum, arbitrage. Match against authorized strategy list.

STRATEGY
KNOWLEDGE CHECK // Q04
How can algorithm fingerprinting detect compromised trading systems?